Princeton’s Endowment Up in 2024, but 3.9% Return Lags Behind Peers

Princeton University reported endowment gains for the first time since 2021, , though the 3.9% return on investments for the last fiscal year was outpaced by every other school in the Ivy League. Five Ivy schools reported returns that more than doubled Princeton’s on a percentage basis.

The Princeton endowment, which ended fiscal year 2024 in June at $34.1 billion, is still the third largest in the Ivy League behind Harvard ($53.2 billion) and Yale ($41.4 billion).

Following the historic 46.9% return on endowment investments in 2021, Princeton reported losses of 1.5% and 1.7% in 2022 and 2023, respectively. The average annual return on the endowment has been 9.2% for the last 10 years and 9.9% over the last 20 years.  

John Tyler ’76, managing director of foundations and endowments at Fiduciary Trust International, explained via email that while it’s tough to say exactly why Princeton lagged behind its peers, “returns are directly correlated to the asset allocation of the university” and other institutions could have “had higher allocations to outperforming sectors.” In addition, Princeton might have had “significant exposure” to hedge funds, which “did not perform particularly well” last year.

Todd Ely, an associate professor in the School of Public Affairs at the University of Colorado Denver and an expert in financial management and policies, also cited the lack of available information as a challenge but pointed to “a long-term investment strategy that underperformed during a year of strong domestic stock market performance.

“While the long-term overexposure to certain asset classes, like venture capital and international markets, may continue to prove effective, short-term underperformance and volatility is to be expected at times,” Ely said.

Princeton announced divestment from fossil fuel stocks and dissociation from some fossil fuel companies in 2022. Though Tyler said fossil fuel stocks and investments “performed very, very well” in 2023, Ely said there is “little to suggest that policies that move away from fossil fuel investments negatively affected recent performance.” 

According to the University’s announcement, distributions from the endowment totaled $1.7 billion last fiscal year, and “over the last 20 years, the endowment has contributed $19.8 billion toward the University’s operations, equivalent to almost double the endowment’s value at the start of that time span.” 

The endowment provides about two-thirds of the University’s net annual operating revenues and helps fund high priority strategic initiatives; it currently covers 70% of the undergraduate financial aid budget.

“Generations of generous philanthropy, coupled with excellent stewardship of our endowment, enable the University to make bold investments in human talent,” said Provost Jennifer Rexford ’91 in the University’s announcement. “The endowment allows us to offer unparalleled financial support to our students, launch major research initiatives, and build state-of-the-art facilities.”

This year’s return was certified by the Princeton University Investment Co. (Princo), the entity that manages the endowment, in October.

Princo president Vincent Tuohey, who succeeded Andrew Golden in June, declined an interview with PAW, and the University declined to answer follow-up questions.  

Endowment Returns in the Ivy League, 

2024 Fiscal Year

Sources: Columbia University Investment Management Co., Brown University, Harvard University Financial Report, Cornell Chronicle, Dartmouth College, Penn Office of Investments, Yale News, Princeton University Office of Communications.

This story was updated after Yale announced its endowment results.